App of the Month #4: Moneybox

App of the Month #4: Moneybox

In November last year, the Bank of England raised interest rates to 0.5%. Economists are now divided over how much they will change in 2018 – particularly due to the UK experiencing high inflation but weak economic growth. Retailers have indicated that the fluctuating UK economy has had a notable impact on Christmas and Boxing Day sales, with consumer increasingly turning to online for better deals.

With The Money Advice Trust (MAT) debt charity encouraging low-earning households to save money for next Christmas, consumers will increasingly have to look for new solutions for saving, managing and, potentially, investing money. Subsequently, several smartphone apps for casual investors have emerged. At the forefront is Moneybox, an app that prompts users to round-up card purchases to the nearest pound in return for small investments in a plethora of well-known companies like Disney, Apple, Netflix and Unilever.

As with any form of investment, there are risks involved. However, Moneybox aims to create an environment that suits the user, offering you three classes of investment – ‘Cautious’ for modest return and minimal risk, ‘Balanced’ for slightly more growth with moderate risk and ‘Adventurous’ for higher return but a higher level of risk.

According to a study commissioned by Aviva, there is a need for UK adults to become better savers by investing in stocks or in an ISA account. Currently, 21% of the UK population have no savings at all and only 10% have investment accounts. As Behavioural Economist Tim Harford argues, people are often not inherently driven to actively save or invest money and often need to be ‘nudged’ into saving more. By systematically investing users’ leftover spare change into small investments, Moneybox enables the general public to slowly save money with minimal impact on their daily life. 

We wanted to get a better understanding of the app and the world of mobile investing by talking to the creators of Moneybox.

Q1. What was the inspiration behind the development of this application?
[We] started Moneybox as a way to help people save and invest. We believe that limited financial education and access to professional advice means that there are a large number of people who are looking to structure their saving in a better way and do more with their money, especially given today’s low interest rates.

Q2. What developments are you working on for the future of the application?
We have a number of developments in the pipeline both in terms of new products and new features but unfortunately can’t share any further information at this stage. Over the next year or two we want to continue to grow our customer base and build features that help our customers to achieve their financial goals, be that saving for a house, saving for retirement, or just for a rainy day. After all, no one really wants ‘an ISA’, they want the freedom or opportunity that saving and investing can bring.

Q3. Do you think the increasing popularity of cryptocurrencies will affect in-app investing? 
I wouldn’t be in a position to comment on cryptocurrencies – this is not something we are looking at in the near future.

Moneybox is available for free download on iOS and Android right now and is certainly a must have for all tech savvy savers.